Across the last three Service Management studies conducted by Aberdeen, we’ve consistently observed that the Chief Service Officer is challenged by three primary pressures: 1) productivity, 2) faster service issue resolution and 3) cost reduction. Interestingly, customer satisfaction was rated a top three pressure in only one of the studies.

With this backdrop of budget uncertainty and increasing competitive pressures among service professionals, the service vendor landscape has been actively consolidating, partnering, geographically expanding and evolving technologically (particularly with the adoption of SaaS). For example, in the past year we’ve observed the following activity in the service vendor community:

Consolidation

• Antenna Acquires Dexterra
• Servigistics & Click Commerce Unite
• Axeda Acquires Questra
• ClickSoftware Acquires Manchitra

Partnerships

• SAP & ClickSoftware
• SAP & Syclo
• Agentek and 360 Scheduling

Geograhic Expansion

• Astea Opens Subsidiary in Japan

No doubt, these are interesting and challenging times for both service management professionals and the vendors that serve them. Over the next week or so, I’ll continue to showcase some of our service management research as I prepare for my opening remarks at the summit. If you are a qualified service management professional and would like a complimentary pass to the summit, please let me know. I hope to see you there! Contact me @andrew_boyd or andrewdotboydataberdeendotcom.

	Trane Larry Wash, President View the Full Bio Charlie Johnson, CIO View the Full Bio
	Ortho Clinical Diagnostics, a Johnson & Johnson Company Troy Taylor, Worldwide Vice President, Customer Technical Services View the Full Bio
	Symantec David Hare, Vice President, Enterprise Support Services View the Full Bio
	Reverse Logistics Association Gailen Vick, President View the Full Bio
	Xerox Bill Steenburgh, Senior Vice President, Xerox Services View the Full Bio
	Dell Tom Maher, Director, Service Parts Support View the Full Bio
	Thermo Fisher Scientific Maggie Guliokas, Head of Customer Advocacy View the Full Bio Ken Woonton, Director, Services Marketing View the Full Bio
	Canada Post Janet LeBlanc, Director, Customer Value Management View the Full Bio
	Boston Red Sox Sarah McKenna, Vice President, Fan Services & Entertainment View the Full Bio Jeff Goldenburg, Director of Concessions & Merchandise Operations
	Cubic Transportation Systems Mary Crossno, Head of IT Operations, CTS-TN View the Full Bio
	Alcatel-Lucent Pat Nelson, Vice President, Spares Management and Repair View the Full Bio
	Pitney Bowes Joanne Boyd, Vice President, Business Development, Multi-Vendor Services View the Full Bio
	LG Electronics Alabama, Inc. Arun Kumar, COO View the Full Bio

Check out the agenda. If you are interested, I do have some comp tickets for qualified service professionals.

1) Organizational mission/ethos guides marketing decisions – last year’s speakers gave several compelling examples of how the organizational mission/ethos guides decision making, particularly in product design and the use of social media:

• Wal-Mart’s Cathy Halligan talked about how the ethos of “everyday low prices” improves the cost of living for everyone.  She attributed Wal-Mart’s success in social media to “customers helping customers”; customers share experiences, rate and review products to help other customers save money.
• Jeff Hayzlett from Kodak discussed how guiding principles drove the design and development of products (in this case the Kodak Zi6 Digital Camcorder and wireless picture frame products) – “press one button and we do the rest.”
• Patrice Varni from Levi’s highlighted the importance of brand values as a driver of their Project Runway 501 Design Challenge.
• Stephan Chase of Marriott discussed the importance of “philosophical fit” – new programs (e.g. social marketing, web 2.0, whatever) need to be authentic, specific to the organization and designed in the context of the organizations guiding principles if they stand a chance of being successful. ‘Cutting and pasting’ someone else’s success will not work with increasingly discerning and cynical customers.

2) Challenge the Status Quo – when Paul DePodesta joined the Oakland A’s as an in-house saberemetrician, he challenged over 100 years of collective baseball “wisdom.”  He started by asking the naive questions – “if we weren’t already doing it this way, how would we start?” Paul introduced a philosophy of managing to the process, not necessarily to the outcomes.  In baseball and in marketing, he suggested the end does not justify the means.  A good outcome as a result (or in spite of) a bad process is not repeatable. Managers must seek out, develop, nurture and support processes that will ensure repeatable and predictable bad outcomes.  He observed: “a long habit not thinking a thing wrong makes it look right.”  The real killer is a good outcome driven from a good result – can success be repeated next time, or were you just lucky?  His advice for repeatable success:

• Measure, Measure, Measure – where are your subjective assumptions? Eliminate the subjective and remove the emotional obstacles – what are you attached to?  Players, ideas… campaigns? If something is not performing as expected, evaluate your options objectively.
• Be mindful of affirmation bias, or the tendency to focus on facts that reinforce opinions.
• Don’t fall victim to physical appearance bias – don’t draw conclusions based solely on appearance. For example, in baseball, Kevin Youkilis:

He has excelled despite a physique that led many observers to underestimate his athletic ability: he was called “roly-poly” by his high school coach, “pudgy” by his college coach, a “fat kid” by general manager Billy Beane… Known for his extraordinary ability to get on base, Youkilis (while still a minor leaguer) was nicknamed “The Greek God of Walks” in the best-selling book, Moneyball: The Art of Winning an Unfair Game. A Gold Glove Award-winning first baseman, he holds baseball’s all-time record for most consecutive errorless games at first base.

• Understand the key metrics driving your business and learn to separate the signals from the noise – Paul arguably reshaped baseball by focusing on a single stat –- on-base percentage. That is, getting runners in a position to score. The flashy stuff like homeruns and stolen bases are sometimes an impediment to scoring.  He challenged us to think about the on-base percentage metric, a single key indicator of success, for our businesses.  In doing these things, Paul warned us about confusing causation and correlation.

3) Correlated to challenging the status quo is having the discipline to kill your sacred cows – when Jeff Hayzell took over marketing for Kodak, he ended some long-standing programs with deep internal emotional attachment (e.g. sponsorship of the Olympics) in favor of new opportunities with the PGA. Marketing leaders must have the discipline to challenge the norm and take quick decisive action.

4) The rising importance of the scientific method in marketing. Impressive stats, great delivery, “looks the part”, initiative feel for how the game is played, traded every two years… star athlete or CMO? With all the talk about baseball, the obvious parallels emerged and several presenters hammered home the point that marketing is no longer a “black art”, where past experience and intuition rule. Marketers are now expected to be equally proficient in scientific methods such as hypothesis testing and empirical observation. Tomorrow’s marketer is expected to be “quant in a qualitative world”.

As I reflect on these observations and the continued conversations that I’ve had with CMO’s over the past year, I’ve observed several additional trends that will be sure to influence the conversation next week (more in a later post). As I put together my opening remarks, I’d be interested in hearing from you.  How has marketing evolved over the past year? What have you learned? What’s working? What’s not? Leave a comment or drop me a line @andrew_boyd.

Again, we have a phenomenal line-up of speakers and a great agenda for this year’s event. If you are interested in a comp ticket, please let me know.

The concept of employee engagement is still in its nascent stages and the benefits are still largely qualitative. While 82% of the Best-in-Class report that employee engagement has had an impact on revenue and/or profitability, only 27% can validate the impact with data. To ensure a long-term organizational commitment, it is imperative for HR professionals and business champions to underpin employee engagement initiatives with with standardized, repeatable and quantitative measures.  Minimally, yearly measurement programs need to be put into place to assess the impact of employee engagement initiatives.  Furthermore, managers should receive training and have access to the appropriate tools to support their efforts.

Best-in-Class organizations have deployed a number of tools and technologies to support their employee engagement initiatives:

• Employee surveys (81%)
• Tools to track employee referrals (53%)
• Skills assessments (51%)
• Development plan management tools (46%)
• Behavioral / personality assessments (36%)

While many of these tools seem pretty common, there is a wide disparity between Best-in-Class and Average/Laggard adoption (page 15 of the report). In the concluding paragraph of the report, Mollie summed it up very nicely:

Engagement is not a single tool or a single strategy, or the job of a single leader or entity within the organization. It is a mindset and a way of thinking about how organizations execute on all human capital initiatives and process, and all interactions with employees… Engagement must be nurtured every day in small and large ways. 

Bottom line for CxOs: Do yourself a favor, if you are thinking about implementing or expanding an employee engagement strategy, do it right. Invest in making sure you have the right capabilities in place, invest in the right tools and make sure your management team is fully on-board… and see it through. The last thing that your business needs is another half implemented, buzzword-compliant, initiative.

You can download a free copy of the report here (available until the end of Sept 2009 - registration required).

Organizations are trying to understand how to motivate employees while still remaining focused on the job to be done - that job is frequently getting bigger and needs to be completed faster with fewer resources.

Clearly, the professional environment is getting more complex and job roles are getting increasingly difficult. While many organizations have asked employees to “do more with less” over the past 11 months, I have often argued that this is the wrong mantra… the focus on productivity is correct, but we need to ask employees to achieve more with fewer resources. Employees approach demands for greater productivity in two ways: 1) they drive harder in order to remain employed, or 2) they strive to achieve more and become an engine of organizational success. The semantic nuance between “do more” and “achieve more” could mean the difference between deep-seeded cynicism and collaborative problem solving.

As Neil Ryder points out in a recent comment, employee engagement is not something that you can “do” without the right building blocks in place; the culture of the business needs to be conducive to evolving a highly engaged workforce. According to Mollie, Best-in-Class organizations are focused on five key capabilities to create a sustainable culture of engagement:

1. Performance goals are agreed to by managers and employees
2. Development plans are agreed to by managers and employees
3. Managers hold regular informal feedback sessions with employees on progress toward goals
4. Senior executives are bought in and fully support engagement efforts
5. Formal or Informal employee recognition programs are in place

In Chapter 3 of the report, Mollie offers an excellent set of recommendations for organizations at all levels of maturity. She also discusses the tools and technological enablers required to support engagement efforts.

Bottom Line for CxOs: If employee engagement is important to you, you need to foster and grow a culture that is conducive to a highly engaged workforce.  A clear, well-articulated and consistent strategy (that is supported by the entire management team) and open, frequent and two-way communications throughout the organization are crucial building blocks for success.

You can download a free copy of the report here (available until the end of Sept 2009 - registration required).

(*multi-pick question, respondents were asked to pick the top-2 reasons)

Ultimately, engagement is about feeling involved in the business, and believing in it… The senior leadership and management team have to take a strong lead in creating an engaged workforce. If the management aren’t ‘up for it’, no amount of programs will ever make a jot of difference to the company.

I agree.

As I perused through Richard’s company blog, I came across an interesting post related to this topic. It is unclear who authored the post, but there was an excellent definition of engagement and some interesting insights on the ownership of the engagement initiatives:

Employee engagement is about connecting the hearts and minds of your employees with the values and vision of your company. It’s about getting your employees to feel more connected with your company, to take greater ownership, responsibility, and go a bit further for your customers, not because you ask them to, but because they want to.

In the same way that the financial success of your company is not just the responsibility of your finance director, employee engagement is not solely the responsibility of your HR department. … No amount of HR initiatives or programs will compensate for the words and actions of your managers. That is not to say that your HR department cannot and should not play a vital role in helping your managers create higher levels of engagement with their employees, but ultimately your managers have to take responsibility for engagement.

Mollie also discusses ownership of engagement in her report. According to our data, at 43% of Best-in-Class companies, the CEO/president is the primary champion of engagement. For “all others” (i.e. the combined average and laggard performers), the primary champion is at the HR leadership level (42%).

Bottom line for CxO’s: Employee engagement is not a buzzword that can be delegated; if you believe that engagement is something that could have a demonstrable impact on your business, you have to spearhead the initiative… and get your management team to support your efforts.

You can download a free copy of the report here (available until the end of Sept 2009 - registration required).

Engagement is all about aligning individuals with the mission and priorities of the organization in order to deliver business results…engagement only really matters if it is driving business results. In fact, this is what differentiates employee engagement from employee satisfaction. Satisfaction could indicate that an individual is happy that their paycheck comes in on time, or they appreciate the fact that they have healthcare benefits that protect their family, or that their schedule doesn’t interfere with their passion for kayaking on the weekend. [Satisfaction] doesn’t necessarily reflect any connection with the priorities of the organization.

The interesting thing about this study of 450 companies, 312 of which already have engagement programs in place, is that it begins to tie employee engagement to business results. According to the study, Best-in-Class organizations (i.e. top 20% of performers on key performance indicators) are 23% more likely to use employee engagement programs to address customer needs and expectations and 55% of Best-in-Class of companies report that employee engagement is having a direct impact on revenue and/or profitability.

As a matter of personal interest, I will be exploring this topic a little more over the next few weeks. In the meantime, you can download a free copy of the report here (available until the end of Sept 2009).